Jindal extends Salem bid date by 3 months

Jindal Stainless Steel has extended its bid for the Salem Steel Plant (SSP) by three months. The company's bid for 74 per cent stake of the plant, currently owned by the Steel Authority of India, had expired on August 12, 2004.

Sources close to the development said, "Jindal has extended its bid for the next three months and the government has accepted the extension." The 74 per cent stake sale was referred to the disinvestment ministry some months ago.

Jindal had bid for the plant over two years ago, when the government had taken a decision to disinvest.

However, since the decision on the matter had been held up for a long time, the Jindals were reconsidering their bid and were also looking for another option.

Sources further said, "Since the government had accepted the extension of the bid, it indicates that the government may still be keen to divest the assets of the steel plant."

The disinvestment of the plant was in line with the financial restructuring and business restructuring agreement between SAIL and the government of India in 2000.

As per the restructuring scheme, SAIL decided to exit from non-core operations. As per the terms of the bid, Salem would be transferred to a joint venture company where Jindal would hold 74 per cent and SAIL, the balance, for a year. After a year, Jindals would be given the option of buying out SAIL.

Meanwhile, analysts said, "Disinvestment of non-core activities was a a priority for SAIL around two years ago since the industry was going through a bad cycle. However, with the revival of the sector, there is a possibility that SAIL might want to review its plan of exiting non-core activities."